Property Tax Exemptions
Intangible personal property was exempted from the tax base in 1945. Our State's 1947 Constitution contains the famous "uniformity clause," which states that:
"Property shall be assessed for taxation under general laws and by uniform rules. All real property assessed and taxed locally or by the State for allotment and payment to taxing districts shall be assessed according to the same standard of value, except as otherwise permitted herein, and such property shall be taxed at the general tax rate of the taxing district in which the property is situated, for the use of such taxing district."
This section was based on an 1875 Amendment to New Jersey's 1844 Constitution. And the next paragraph similarly ‘grandfathered' all property tax exemptions "validly granted" (under the 1844 Constitution) "and now in existence." But it subjected those exemptions to future legislative amendment or repeal, "except those exempting real and personal property used exclusively for religious, educational, charitable or cemetery purposes...." Further, it granted the legislature the power to enact other exemptions "only by general law." The Constitution also allowed the legislature to permit municipalities to grant exemptions or abatements in areas in need of redevelopment and rehabilitation.
In 1953 the Constitutional property tax deduction for veterans who served in time of war or emergency was extended to widows of those who died on duty. In 1960 an Amendment was approved which allowed a property tax deduction for senior citizens. In 1963 the Constitution was amended to permit the assessment of farmland at its value for agricultural purposes.
In 1966 non-business personal property was exempted by the legislature, along with business inventories and the taxation of other business personal property was circumscribed. The 1966 law also rescinded the Retail Gross Receipts Tax, the Corporation Business Tax, the Business Personal Property Tax and the Unincorporated Business Tax and provided for level State ‘hold-harmless' funding to compensate local taxing units for these revenue losses.
Other Exempt Properties
In addition to these provisions other exempt properties include:
- Certain historic properties
- Conservation or recreation land owned by non-profits
- Dedicated pet cemeteries
- Property owned by medical service corporations or dental service corporations or New Jersey School Boards Association
- Those occupied by district superintendents of religious organizations
- Those used by certain youth associations or veterans' associations or fraternal organizations
- Those used by governments or public authorities
The total 2012 estimated market value of all exempt property in New Jersey was over $136 Billion. The net value of all taxable land and improvements in that same year was just over $982 Billion.